Petrocaribe on thin ice

22.07.05 | There are doubts now on the part of some of Petrocaribe's partners of the Venezuelan Caribbean oil pact signed in Caracas last month. For one, the Caricom appointed Trinidad Prime Ministers Erick Williams to renegotiate the deal on their behalf and on Wednesday, Bahamas Trade Minister Leslie Miller said to the press the deal may be thrashed out because the Cabinet has serious concerns about the deal.

The Caricom leaders at their summit two weeks ago decided that Mr Manning should be the one to lead negotiations on their behalf with Venezuela on any matters arising out of an oil deal which is designed to give cheap oil prices to the Caribbean countries that signed the deal. Neither Trinidad nor Barbados signed the deal.

The second thoughts are coming into light after the different governments analyzed the advantages and disadvantages of the deal in light of a regional energy policy, focusing in particular on issues of energy pricing within the evolving Caricom single market and economy.

The advantages of receiving crude oil products at lower than international prices sounds in principle a good deal, but the economics of it do not necessarily benefit the citizens of the countries nor does it translate directly into lower prices for the petroleum products needed by the region, a high Caribbean official told Petroleumworld.

The view now taken by some governments is that the agreement would only benefit electricity corporations in some of the countries and not end users, said the source.

The source added, that it seems that for the agreement to take effect each country would have to arrange bilateral agreements with Venezuela for the accord to come into force.